Consider this Factor Before Retiring Early
Consider this Factor Before Retiring Early
What’s the perfect time to retire? If you’re like a lot of people, you’re saying, Right now… I wish! Many of us dream about an early retirement, but most of the time we plan to stop working around age 65 or a bit later.
Of course, whether we want to retire early or not, sometimes things don’t work out the way we had imagined. Sometimes illness or disability, a poor job market, or some other factor will encourage us to retire earlier than we had planned. On the other hand, some people feel financially well-prepared to retire early, and they want to go ahead and take that leap.
We all know that it’s important to save enough retirement funds, so that distributions from the account will last the rest of our lives. But there’s one other factor you should carefully consider before you retire early: What will you do about the cost of healthcare?
You won’t be eligible for Medicare until age 65, so how do you plan to cover medical bills until then? If you’re one of the lucky ones, your former company provides a retiree health plan. But since those plans are quickly going extinct, you probably can’t count on it. Even if you do have such a plan, the out-of-pocket expenses might be much higher than you’re accustomed to paying.
Another option is to shop for your own health insurance policy independently. Premiums will vary according to your state of health, where you live, and some other factors. Remember that premiums will most likely rise each year. And of course, right now the political future of healthcare is very much up in the air.
An early retirement is certainly a possibility for some people. We just want you to consider the high (and continuing to rise) cost of healthcare first, so that you don’t face an unpleasant surprise. If you’re weighing your options, give us a call and we’ll be happy to help you do the math. We can also help you devise creative financial planning strategies to help you address your goals.